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25/08/2008
Anger At VAT On Tips Added To Bill
An Irish trade union has warned that gratutites (tips) are now set to be taxable, under new proposals from the Revenue Commissioners.
Siptu, which represents workers in the hospitality industry, has warned thousands of employees will suffer from the new tax measures, which will see staff working in hotels and restaurants charged VAT on tips they receive from customers.
An existent concession, which operated widely throughout the hotel and restaurant sector, ensured staff tips included as part of the bill were received tax-free.
The Revenue Commissioners however, have announced they will withdraw the concession from 1st September, after which, all service charges included in hotel and restaurant bills will be liable to VAT at 13.5%.
The Revenue Commission’s Vat Guide 2008 said: "Where a hotel,restaurant etc. presents a bill for a meal or any other service, then all charges included in the bill presented to the customer are liable to VAT.
"This includes any amount or percentage in respect of service or similar charges."
However tips, which are paid outside the actaul bill - that is, handed to the waiter - will remain tax free.
But, a spokesman from Siptu said the union was opposed to the new approach: "This is one of the lowest paid sectors in the economy and any attempt by employers to put their hands into the pockets of these workers will be resisted by Siptu."
(DW)
Siptu, which represents workers in the hospitality industry, has warned thousands of employees will suffer from the new tax measures, which will see staff working in hotels and restaurants charged VAT on tips they receive from customers.
An existent concession, which operated widely throughout the hotel and restaurant sector, ensured staff tips included as part of the bill were received tax-free.
The Revenue Commissioners however, have announced they will withdraw the concession from 1st September, after which, all service charges included in hotel and restaurant bills will be liable to VAT at 13.5%.
The Revenue Commission’s Vat Guide 2008 said: "Where a hotel,restaurant etc. presents a bill for a meal or any other service, then all charges included in the bill presented to the customer are liable to VAT.
"This includes any amount or percentage in respect of service or similar charges."
However tips, which are paid outside the actaul bill - that is, handed to the waiter - will remain tax free.
But, a spokesman from Siptu said the union was opposed to the new approach: "This is one of the lowest paid sectors in the economy and any attempt by employers to put their hands into the pockets of these workers will be resisted by Siptu."
(DW)
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